Which statement correctly describes the function of a flat deductible in a major medical policy?

• A. It is a fixed amount the insured pays before benefits apply
• B. It is a percentage of charges the insured pays after reimbursement
• C. It is a monthly fee
• D. It is refunded at policy end

Answer: (A)

A flat deductible is a fixed dollar amount the insured must pay out-of-pocket before the policy starts paying benefits. This means you cover that specific amount first in a benefit period, and once it’s met, the plan begins sharing costs (often through coinsurance) until other limits are reached. It’s not a percentage of charges, not a recurring monthly fee, and it isn’t something refunded at the end. For example, if the deductible is $1,000, you pay the first $1,000 of eligible expenses, and then the insurer begins to pay according to the policy’s terms.